Feds streamline process for offshore permit applications

By Jennifer A. Dlouhyjennifer.dlouhy@chron.com

Published 5:15 pm, Friday, June 3, 2011

WASHINGTON — Federal regulators Friday launched a streamlined process for vetting applications for offshore drilling permits in response to complaints from oil and gas companies that the government's previous system was unwieldy.

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“We are constantly looking for ways to create a smarter, more efficient and more transparent permit review process,” he said in a statement. “Our goal is to make the process of submitting permit applications easier, reduce the time it takes to review permits and improve BOEMRE's communication with operators during the permit review process.”

Industry leaders have asked regulators for more clarity about permit applications, in some cases requesting blueprints to guide their proposals or unsuccessfully seeking a peek at competitors' applications.

Before last year's Gulf spill — and the adoption of new safety and environmental mandates governing offshore oil and gas development — deep-water drilling applications frequently were less than 100 pages long. Now, operators say they are filing applications with thousands of pages, even before adding detailed plans for containing blown-out deep-sea wells using systems from the Marine Well Containment Company or the Helix Well Containment Group.

The sheer size of the applications has made them difficult to manage, said George Morris, chief operating officer of Houston-based ATP Oil & Gas Corp. “We went from 39 pages to 3,900 pages on a permit,” Morris said. “It's just volumes of paper, and because it's volumes of paper, you need to make sure everything is correct, and it takes a lot of time to get these out.”

Under new procedures outlined Friday, BOEMRE staff will examine applications to make sure they are complete before launching a substantive review of proposed drilling projects. The goal is to identify any lapses early on, rather than finding omissions during the detailed analysis of a proposal's substance.

Regulators at BOEMRE also hope the change will reduce the number of times permit applications are returned to operators as incomplete.

“BOEMRE personnel currently spend significant time reviewing incomplete permit applications and sending the applications back to operators multiple times before receiving a complete application,” said a bureau representative. “This wastes precious time and staff resources and has proved frustrating for agency staff and operators alike.”

The government also clarified how it will prioritize applications, with complete proposals for more work at ongoing operations getting the most urgent attention. Applications deemed complete are next in the queue, followed by those that aren't quite ready. Proposals to drill emergency relief wells still will take precedence.

Oil and gas industry officials welcomed the changes.

“Much of the permitting process has been confusing and frustrating to our members, particularly in the last year,” said Randall Luthi, president of the National Ocean Industries Association. “This is a great example of what can happen when industry and the regulators communicate their frustrations and suggestions with one another.”

Luthi said the guidance would help oil and gas companies “make their applications as thorough as possible.”

Jim Noe, senior vice president of Hercules Offshore, and head of the Shallow Water Energy Security Coalition that has lobbied for similar changes, said the government's new plans “are instrumental to making this process function more efficiently.” He said BOEMRE should go a step further and prioritize applications to drill in shallow waters that generally have lower geological pressures and fewer environmental risks than do deeper wells.

Unless shallow-water permits are given priority and the administration provides “clear and unequivocal” support for offshore energy development, Noe said, “our expectations that these steps will meaningfully improve the permitting process are limited at best.”